DIRT BIKES USA

• PROBLEM: ANALYZING THE IMPACT OF COMPONENT PRICE CHANGES

• REQUIRED BUSINESS SKILLS: MANUFACTURING BILL OF MATERIALS

SENSITIVITY ANALYSIS

• REQUIRED SOFTWARE SKILLS: SPREADSHEET FORMULAS, 2-VARIABLE DATA

TABLE

PROJECT NAME: IMPROVING DECISION MAKING--DIRT BIKES USA

Through this particular case study I was able to look further into what is known as a “bill of
materials,” used in manufacturing and production to show all of the parts required to manufacture a
specific item, and in this example the Moto 300 model. This bill of materials is extremely useful in
determining how product costs will be affected by price changes in materials used in production of a
product. A table was given identifying the various parts used in production of the Moto 300, their
component number, source and quantity. From this information I was able to then calculate the
Extended cost of each component by using a simple excel formula multiplying unit cost times the
quantity. With the extended cost calculated I then was able to see the total extended cost of all
components by using the SUM function in Excel, this then completing the bill of materials. I then
completed a sensitivity analysis from the data to determine the impact on total brake system
materials cost if the front brake calipers and brake pipes unit cost were to vary. This sensitivity
analysis helps plan for future periods and any variations if costs were to vary due to inflation or
increased production costs.